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Nigeria’s Naira Weakens for First Time in 6 Sales on Demand From
Lenders
By Emele Onu
July 13 (Bloomberg News) --
Nigeria’s naira weakened at a central-bank auction
today, snapping five straight increases as lenders demanded the
most foreign currency in five sales.
The marginal rate, which is used as the prevailing exchange
rate, fell to 150.08 per dollar compared with 150 at the
previous sale, the Abuja-based bank said in an e-mailed
statement. The bank sold $250 million, less than the $410
million demanded, the biggest amount sought since the June 27
sale. In the
interbank market, the naira depreciated 0.4 percent
to 152.4 per dollar by 4:08 p.m.
“High
government spending is putting the naira under
pressure,”
Bismarck Rewane, managing director of Financial
Derivatives Co., a brokerage, said by phone. “Speculative demand
is expected, as dealers can buy at the central-bank auction at
the current low price” while the rate in the black market is
about 162 per dollar, he said.
President
Goodluck Jonathan, who was returned to power in April
elections, slashed almost 500 billion naira ($3.3 billion) off a
budget adopted two months earlier, taking the final spending
plan to 4.5 trillion naira.
The central bank of sub-Saharan Africa’s second-biggest economy
and largest oil producer has been using foreign-currency
reserves to keep the naira within a 3 percentage-point band
above or below 150 per dollar at its twice-weekly auctions.
Foreign-currency reserves stood at $31.7 billion by July 4
compared with $37 billion a year earlier, according to central-
bank data.
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